Interest Rates
The analysis of various interest rates is of great interest to stock market investors. There is the constant concern that higher interest rates translate to lower corporate profits (thus, to less profit potential in the market). There also is a concern that investors will be attracted to higher interest rates in debt investments, and that money will then flow out of the stock market and into other areas. Less money weakens demand! so ultimately, such a move results in lower stock prices.
In studying interest rates, be aware of the constant competition for investor funds between equity investments or debt investments. Buying shares of stock directly or through mutual funds is the best known form of equity investment. When investors purchase bonds, they are lending their money to the issuers in exchange for interest. When investors place funds in savings accounts, certificates of deposit, and demand deposits, they are agreeing to allow an institution to use their funds in exchange for payment of interest. All of these are debt investments.
Trends in interest rates are of critical importance because the stock market competes with the bond market for finite investor dollars. When bonds look more attractive than stocks because of changing interest rates, that is seen as bad news for the stock market.
The analysis of interest rates includes a study of the money market, as well as rates on mortgages. In addition to showing rates for widely used money market instruments, the report also includes the latest information on the three most significant measures of interest: the discount rate, the prime rate, and the federal funds rate. Reporting format for the status of rates shows the latest reported periods compared to the period immediately preceding and the same period one year ago:

The mortgage tables show the indexes used by lenders for determining the effective rate on adjustable rate mortgages. When such loans are granted, periodic adjustments to the rate being charged are based on changes in one of the indexes reported in this section. The report appears like this:

Reports are also provided for sample yields on money market accounts and certificates of deposit of various holding duration, for various institutions around the country.